Legislature(2003 - 2004)

04/15/2004 01:30 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 15, 2004                                                                                         
                           1:30 p.m.                                                                                            
TAPE(S) 04-32, 33                                                                                                             
MEMBERS PRESENT                                                                                                               
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Bettye Davis                                                                                                            
Senator Hollis French                                                                                                           
MEMBERS ABSENT                                                                                                                
Senator Gary Stevens                                                                                                            
COMMITTEE CALENDAR                                                                                                            
^CONFIRMATION HEARINGS                                                                                                        
^BRD OF REGIS FOR ARCHITECTS, ENGINEERS AND LAND SURVEYORS                                                                    
Clifford E. Baker - Kenai                                                                                                       
Boyd J. Brownfield - Anchorage                                                                                                  
Richard A. Hughes - Fairbanks                                                                                                   
Kenneth D. Maynard - Anchorage                                                                                                  
^ALASKA LABOR RELATIONS AGENCY                                                                                                
Gary P. Bader - Anchorage                                                                                                       
Dennis Niedermeyer - Eagle River                                                                                                
James S. Spalding - Anchorage                                                                                                   
CS FOR HOUSE BILL NO. 428(JUD) am                                                                                               
"An Act relating to civil liability for acts related to                                                                         
obtaining alcohol for persons under 21 years of age or for                                                                      
persons under 21 years of age being on licensed premises."                                                                      
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE BILL NO. 272                                                                                                             
"An  Act  relating to  certain  monetary  advances in  which  the                                                               
deposit or  other negotiation  of checks to  pay the  advances is                                                               
delayed  until  a later  date;  and  providing for  an  effective                                                               
     SCHEDULED BUT NOT HEARD                                                                                                    
SENATE BILL NO. 358                                                                                                             
"An   Act  relating   to  the   performance  of   railroad  track                                                               
construction  work  for  the  Department  of  Transportation  and                                                               
Public Facilities by the Alaska Railroad Corporation."                                                                          
     MOVED SB 358 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 377                                                                                                             
"An Act  relating to the  state's mechanical code,  to mechanical                                                               
contractors   and   mechanical  administrators,   to   mechanical                                                               
standards and inspections involved  in certain housing loans, and                                                               
to the  adoption of  the state's  mechanical code;  and providing                                                               
for an effective date."                                                                                                         
     HEARD AND HELD                                                                                                             
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 29(JUD) am                                                                         
"An  Act  relating  to  real estate  licensees  and  real  estate                                                               
transactions; and providing for an effective date."                                                                             
     HEARD AND HELD                                                                                                             
CS FOR HOUSE BILL NO. 91(FIN)                                                                                                   
"An Act relating  to medical benefits for  retired peace officers                                                               
after 20 years of credited service."                                                                                            
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 358                                                                                                                  
SHORT TITLE: ALASKA RAILROAD TRACK WORK                                                                                         
SPONSOR(s): TRANSPORTATION                                                                                                      
03/03/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/03/04       (S)       TRA, L&C                                                                                               
03/04/04       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
03/04/04       (H)       -- Meeting Canceled --                                                                                 
03/05/04       (S)       TRA RPT 3DP 2NR                                                                                        
03/05/04       (S)       DP: WAGONER, COWDERY,THERRIAULT                                                                        
03/05/04       (S)       NR: LINCOLN, OLSON                                                                                     
03/23/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/23/04       (S)       Heard & Held                                                                                           
03/23/04       (S)       MINUTE(L&C)                                                                                            
04/01/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/01/04       (S)       <Bill Hearing Postponed>                                                                               
04/13/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/13/04       (S)       -- Meeting Canceled --                                                                                 
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 377                                                                                                                  
SHORT TITLE: STATE MECHANICAL CODE                                                                                              
SPONSOR(s): LABOR & COMMERCE                                                                                                    
03/26/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/26/04       (S)       L&C, FIN                                                                                               
04/01/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/01/04       (S)       Heard & Held                                                                                           
04/01/04       (S)       MINUTE(L&C)                                                                                            
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: HB  29                                                                                                                  
SHORT TITLE: REAL PROPERTY TRANSACTIONS/LICENSEES                                                                               
SPONSOR(s): REPRESENTATIVE(s) ROKEBERG                                                                                          
01/21/03       (H)       PREFILE RELEASED (1/10/03)                                                                             
01/21/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/03       (H)       L&C, JUD                                                                                               
01/20/04       (H)       SPONSOR SUBSTITUTE INTRODUCED                                                                          
01/20/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/20/04       (H)       L&C, JUD                                                                                               
02/04/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
02/04/04       (H)       Moved CSSSHB 29(L&C) Out of Committee                                                                  
02/04/04       (H)       MINUTE(L&C)                                                                                            
02/05/04       (H)       L&C RPT CS(L&C) 6DP 1NR                                                                                
02/05/04       (H)       DP: CRAWFORD, LYNN, GATTO, ROKEBERG,                                                                   
02/05/04       (H)       DAHLSTROM, ANDERSON; NR: GUTTENBERG                                                                    
02/18/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/18/04       (H)       Heard & Held                                                                                           
02/18/04       (H)       MINUTE(JUD)                                                                                            
02/20/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/20/04       (H)       Moved CSSSHB 29(JUD) Out of Committee                                                                  
02/20/04       (H)       MINUTE(JUD)                                                                                            
02/26/04       (H)       JUD RPT CS(JUD) 4DP 2NR                                                                                
02/26/04       (H)       DP: SAMUELS, ANDERSON, OGG, MCGUIRE;                                                                   
02/26/04       (H)       NR: GARA, GRUENBERG                                                                                    
03/04/04       (H)       TRANSMITTED TO (S)                                                                                     
03/04/04       (H)       VERSION: CSSSHB 29(JUD) AM                                                                             
03/05/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/04       (S)       L&C, JUD                                                                                               
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: HB  91                                                                                                                  
SHORT TITLE: RETIRED PEACE OFFICER'S MEDICAL BENEFITS                                                                           
SPONSOR(s): REPRESENTATIVE(s) ANDERSON                                                                                          
02/12/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/12/03       (H)       L&C, FIN                                                                                               
02/21/03       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
02/21/03       (H)       Moved Out of Committee                                                                                 
02/21/03       (H)       MINUTE(L&C)                                                                                            
02/24/03       (H)       L&C RPT 4DP 1NR                                                                                        
02/24/03       (H)       DP: GATTO, CRAWFORD, GUTTENBERG,                                                                       
02/24/03       (H)       ANDERSON; NR: ROKEBERG                                                                                 
03/18/03       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/18/03       (H)       Heard & Held                                                                                           
03/18/03       (H)       MINUTE(FIN)                                                                                            
02/17/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/17/04       (H)       Heard & Held                                                                                           
02/17/04       (H)       MINUTE(FIN)                                                                                            
02/19/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/19/04       (H)       Moved CSHB 91(FIN) Out of Committee                                                                    
02/19/04       (H)       MINUTE(FIN)                                                                                            
02/23/04       (H)       FIN RPT CS(FIN) NT 3DP 7NR                                                                             
02/23/04       (H)       DP: CROFT, FATE, WILLIAMS; NR: MEYER,                                                                  
02/23/04       (H)       HAWKER, JOULE, MOSES, CHENAULT, FOSTER,                                                                
02/23/04       (H)       HARRIS                                                                                                 
03/04/04       (H)       TRANSMITTED TO (S)                                                                                     
03/04/04       (H)       VERSION: CSHB 91(FIN)                                                                                  
03/05/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/04       (S)       STA, L&C, FIN                                                                                          
03/18/04       (S)       STA AT 3:30 PM BELTZ 211                                                                               
03/18/04       (S)       Heard & Held                                                                                           
03/18/04       (S)       MINUTE(STA)                                                                                            
04/01/04       (S)       STA AT 3:30 PM BELTZ 211                                                                               
04/01/04       (S)       Moved CSHB  91(STA) Out of Committee                                                                   
04/01/04       (S)       MINUTE(STA)                                                                                            
04/02/04       (S)       STA RPT SCS   3NR            SAME TITLE                                                                
04/02/04       (S)       NR: STEVENS G, COWDERY, STEDMAN                                                                        
04/13/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/13/04       (S)       -- Meeting Canceled --                                                                                 
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
Clifford  E. Baker,  Boyd J.  Brownfield and  Richard A.  Hughes,                                                               
Boyd  J. Brownfield,  Richard  A. Hughes,  Kenneth  D. Maynard  -                                                               
nominees to  the Board Of Registration  For Architects, Engineers                                                               
And Land Surveyors                                                                                                              
Gary P. Bader, Dennis Niedermeyer and James S. Spalding,                                                                        
nominees to the Alaska Labor Relations Agency                                                                                   
Mr. John Guichici                                                                                                               
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Opposes Mr. Spaulding's appointment.                                                                      
Mr. Jay Quakenbush                                                                                                              
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Opposes Mr. Spaulding's appointment.                                                                      
Ms. Roberta Demoski                                                                                                             
International Brotherhood of Electrical Workers (IBEW)                                                                          
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed Mr. Spaulding's appointment.                                                                      
Mr. Paul Weisenberger                                                                                                           
Sheet Metal Workers                                                                                                             
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes Mr. Spaulding's appointment.                                                                      
Mr. Scott Bridges                                                                                                               
Teamsters Local 959                                                                                                             
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes Mr. Spaulding's appointment.                                                                      
Mr. John Landerfelt                                                                                                             
Laborers Local 341                                                                                                              
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes Mr. Spaulding's appointment.                                                                      
Ms. Wendy Lindskoog, Director                                                                                                   
External Affairs                                                                                                                
Alaska Railroad Association                                                                                                     
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 358.                                                                                          
Mr. Zack Warwick                                                                                                                
Staff to Senator Therriault                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Commented on SB 377 for sponsor.                                                                         
Mr. Jeff Robinson                                                                                                               
Cliff's Mechanical                                                                                                              
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 377.                                                                                           
Ms. Vicki Sterling                                                                                                              
Design Professional                                                                                                             
No address provided                                                                                                             
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Craig Stephenson                                                                                                            
International Code Council                                                                                                      
No address provided                                                                                                             
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Ernie Hetrick                                                                                                               
Design Professional                                                                                                             
No address provided                                                                                                             
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Kelly Nicoleillo                                                                                                            
Department of Public Safety                                                                                                     
PO Box 111200                                                                                                                   
Juneau, AK  99811-1200                                                                                                          
POSITION STATEMENT: Available to answer technical questions                                                                   
about SB 377.                                                                                                                   
Mr. Dale Nelson, President                                                                                                      
Alaska Professional Design Council                                                                                              
No address provided                                                                                                             
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Dale Nelson, President                                                                                                      
Alaska Design Council                                                                                                           
Delta AK                                                                                                                        
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. John Knabe, Training Director                                                                                               
UA Local 375 Plumbers and Pipefitters Joint Apprenticeship                                                                      
Training Committee                                                                                                              
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Jim Lahti                                                                                                                   
Pipefitters 375                                                                                                                 
Fairbanks AK                                                                                                                    
POSITION STATEMENT:  Supports SB 377.                                                                                         
Mr. Rodney Brown                                                                                                                
Plumbers and Pipefitters Local 375                                                                                              
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. David Peet                                                                                                                  
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Dennis Michael, President and Owner                                                                                         
American Mechanical                                                                                                             
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Dayn Cooper                                                                                                                 
Chandler Plumbing and Heating                                                                                                   
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Mark Anderson, Construction Manager                                                                                         
Chandler Plumbing and Heating                                                                                                   
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Bill Sager, Executive Director                                                                                              
Mechanical Contractors of Fairbanks                                                                                             
Fairbanks, Alaska 99707                                                                                                         
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Chuck Deerdon                                                                                                               
City Building Inspector                                                                                                         
City of Ketchikan Gateway Borough                                                                                               
344 Front Street                                                                                                                
Ketchikan, Alaska 99901                                                                                                         
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Steve Shows                                                                                                                 
Juneau AK                                                                                                                       
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Max Mielke, Business Manager                                                                                                
Plumbers and Pipefitters UA Local 262                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Robert Buch                                                                                                                 
Local 367                                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Gary Hile                                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Harry Devasconcelles                                                                                                        
Alaska Oil and Gas Association (AOGA)                                                                                           
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Greg Moore                                                                                                                  
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Pat Knowles                                                                                                                 
Mt. Mechanical                                                                                                                  
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Frank Kapelari                                                                                                              
Knik Plumbing                                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT:  Supports SB 377.                                                                                         
Mr. Colin Maynard                                                                                                               
BBFM Engineers                                                                                                                  
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 377.                                                                                           
Mr. Craig Hately                                                                                                                
Local 367                                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Mr. Steve Miller                                                                                                                
Plumbers Local 367 3 ATC                                                                                                        
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 377.                                                                                          
Representative Rokeberg                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 29.                                                                                         
Ms. Peggy Ann McConnochie                                                                                                       
Alaska Association of Realtors                                                                                                  
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 29.                                                                                           
Mr. Perry Underwood                                                                                                             
Alaska Association of Realtors                                                                                                  
Eagle River AK 99577                                                                                                            
POSITION STATEMENT: Supports HB 29.                                                                                           
Mr. Dave Feeken, Chair                                                                                                          
Legislative and Industry Issues                                                                                                 
Alaska Association of Realtors                                                                                                  
Eagle River AK                                                                                                                  
POSITION STATEMENT: Supports HB 29.                                                                                           
Mr. Steven Cleary, Executive Director                                                                                           
Alaska Public Interest Research Group (AKPIRG)                                                                                  
Anchorage AK                                                                                                                    
POSITION STATEMENT:  Commented on HB 29.                                                                                      
Ms. Linda Garrison, Owner and Broker                                                                                            
AAR Number 1 Buyer's Agency                                                                                                     
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes HB 29.                                                                                            
Mr. Kirk Wickersham                                                                                                             
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports HB 29.                                                                                           
Representative Tom Anderson                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 91.                                                                                         
Mr. Mike Fox                                                                                                                    
Public Safety Employees Association (PSEA)                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 91.                                                                                           
Mr. Chuck Hansen, Correctional Officer                                                                                          
Lemon Creek Correctional Facility                                                                                               
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 91.                                                                                           
Ms. Melanie Millhorn, Director                                                                                                  
Division of Retirement and Benefits                                                                                             
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT: Deferred testimony on HB 91.                                                                              
Mr. Dean Baugh, Finance Director                                                                                                
City of Homer                                                                                                                   
Homer AK                                                                                                                        
POSITION STATEMENT: Opposes HB 91.                                                                                            
Mr. Maurice Hughes                                                                                                              
Alaska State Trooper                                                                                                            
Public Service Employees Association (PSEA)                                                                                     
PO Box 802                                                                                                                      
Kodiak AK                                                                                                                       
POSITION STATEMENT:  Supports HB 91.                                                                                          
Mr. Paul Comolli                                                                                                                
Police Officer                                                                                                                  
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 91.                                                                                           
Mr. Larry Simmons, Finance Director                                                                                             
City of Kenai                                                                                                                   
Kenai AK                                                                                                                        
POSITION STATEMENT:  Opposes HB 91.                                                                                           
Mr. Chris Burns                                                                                                                 
Human Resource Consulting                                                                                                       
Seattle WA                                                                                                                      
POSITION STATEMENT: Available to answer questions.                                                                            
ACTION NARRATIVE                                                                                                              
TAPE 04-32, SIDE A                                                                                                            
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order  at 1:30  p.m. Present  were Senators                                                               
Bettye Davis, Ralph  Seekins, Hollis French and  Chair Con Bunde.                                                               
Senator Gary Stevens was excused.                                                                                               
CONFIRMATION HEARINGS                                                                                                         
ARCHITECTS, ENGINEERS AND LAND SURVEYORS                                                                                      
The  first order  of business  to come  before the  committee was                                                               
confirmation  hearings   for  the   Board  of   Registration  for                                                               
Architects, Engineers  and Land Surveyors -  Clifford Baker, Boyd                                                               
Brownfield,  Richard Hughes  and  Kenneth Maynard.  He asked  for                                                               
questions, but there were none.                                                                                                 
LABOR RELATIONS AGENCY                                                                                                        
Next, he  took up  the Alaska Labor  Relations Agency  nominees -                                                               
Gary  Bader, Dennis  Niedermeyer  and James  Spaulding. He  noted                                                               
there were questions for Mr. James Spaulding.                                                                                   
CHAIR BUNDE asked if Mr. Spaulding had an opening statement.                                                                    
MR. JAMES  SPAULDING said  he didn't have  a statement,  but this                                                               
appointment took him by surprise.                                                                                               
     I've spent most  of my adult life in  Alaska and Alaska                                                                    
     has been  very good to  me. I've worked for  both labor                                                                    
     and  management in  the field  of  human resources  and                                                                    
     labor relations  and I feel  like I  can do a  fair and                                                                    
     objective job.                                                                                                             
SENATOR HOLLIS  FRENCH said that  usually these  appointments get                                                               
very  little attention,  but  he  had received  5  to 10  e-mails                                                               
opposing his appointment. The tenor  of the objections was that a                                                               
management person was being appointed to  a labor seat on a labor                                                               
relations panel. He  asked Mr. Spaulding to  describe his current                                                               
position at Matanuska Electric Association (MEA).                                                                               
MR. SPAULDING replied that he  is the director of Human Resources                                                               
and Corporate  Affairs and oversees  all the human  resource (HR)                                                               
and labor functions for MEA.                                                                                                    
SENATOR FRENCH asked if he represented labor or management.                                                                     
MR. SPAULDING replied that he represents management.                                                                            
SENATOR FRENCH asked  if he represented labor  or management when                                                               
he went to arbitrations.                                                                                                        
MR. SPAULDING replied that he represents management.                                                                            
SENATOR FRENCH asked  if he reports to management  in his current                                                               
MR. SPAULDING replied yes.                                                                                                      
SENATOR FRENCH asked him, as  a management person, to address the                                                               
concerns  of  the  folks  who   are  concerned  about  his  being                                                               
appointed to a labor seat.                                                                                                      
MR.  SPAULDING   replied  that   he  had   worked  for   a  labor                                                               
organization in the  past and has sat on both  sides of the table                                                               
in negotiations  and grievance investigations.  "I feel I  have a                                                               
pretty  good   knowledge  of  labor   perspective  from   both  a                                                               
management  and  labor  viewpoint."  Most  folks  he  dealt  with                                                               
thought he was very fair.                                                                                                       
SENATOR FRENCH asked how long he had worked for MEA.                                                                            
MR. SPAULDING replied since September 1997.                                                                                     
SENATOR FRENCH asked who he worked for before that.                                                                             
MR. SPAULDING replied that City of Unalaska.                                                                                    
SENATOR FRENCH asked what he did in Unalaska.                                                                                   
MR.  SPAULDING  replied that  he  was  the human  resources  (HR)                                                               
manager for the city.                                                                                                           
SENATOR FRENCH asked if that was similar to the job he has now.                                                                 
MR. SPAULDING replied that it is very similar.                                                                                  
SENATOR FRENCH asked  how long he worked in Unalaska  and who did                                                               
he work for.                                                                                                                    
MR. SPAULDING  answered that  he worked for  three years  for the                                                               
city  as the  HR  manager; he  also worked  for  three years  for                                                               
Unisea, a very large seafood processing company in Dutch Harbor.                                                                
SENATOR FRENCH asked if that preceded his work for the city.                                                                    
MR. SPAULDING replied yes, they weren't simultaneous.                                                                           
SENATOR  FRENCH  asked  if  his  work for  Unisea  was  in  human                                                               
MR. SPAULDING replied yes.                                                                                                      
SENATOR FRENCH asked if that was a management position.                                                                         
MR. SPAULDING replied yes.                                                                                                      
SENATOR FRENCH asked if he was  correct, then, that since 1991 he                                                               
had been  basically in management  positions in  his professional                                                               
MR. SPAULDING  responded that  the period of  time he  worked for                                                               
labor was  in the mid-80s  when he  worked for the  Alaska Public                                                               
Employees Association  (APEA) as  a senior  labor representative.                                                               
After that  he went to Washington  for two years to  care for his                                                               
father  and  then he  worked  for  Marine Management  in  Seattle                                                               
there. He moved back to Alaska in 1990 with Unisea.                                                                             
SENATOR FRENCH  asked when the last  time was that he  held a job                                                               
that could be classified as a labor-type perspective job.                                                                       
MR. SPAULDING replied his position with APEA in the mid-80s.                                                                    
SENATOR BETTYE DAVIS  asked if he was surprised  he received this                                                               
appointment because he didn't apply for it.                                                                                     
MR.  SPAULDING replied  that he  did  apply, but  didn't know  he                                                               
would be considered.                                                                                                            
SENATOR  DAVIS asked  him what  he  thought his  responsibilities                                                               
would be  and how did  he feel about  working on the  labor side,                                                               
since he had been in management so long.                                                                                        
MR. SPAULDING  replied that he  has a good understanding  of what                                                               
the board  and agency do.  He appeared before them  several times                                                               
when he worked  for the City of Unalaska. He  understood that the                                                               
board  is  a  quasi-judicial  body that  hears  disputes  between                                                               
public employees and  their employers on a variety  of issues. He                                                               
felt that  he still has a  pretty good understanding of  that and                                                               
of the  state and could  apply that  understanding in a  fair and                                                               
judicious manner.                                                                                                               
SENATOR DAVIS asked if he had  anything filed against him by some                                                               
of the employees and MEA.                                                                                                       
MR. SPAULDING replied no, not that he is aware of.                                                                              
CHAIR BUNDE  asked if  he believed one  had to be  a member  of a                                                               
union to be able to make fair and impartial decisions.                                                                          
MR. SPAULDING replied no.                                                                                                       
CHAIR  BUNDE asked  if he  believed  one had  to be  a member  of                                                               
management to make fair and impartial decisions.                                                                                
MR. SPAULDING replied no.                                                                                                       
CHAIR BUNDE asked if he was  capable of making fair and impartial                                                               
MR. SPAULDING replied that he thought so, yes.                                                                                  
MR.   JOHN   GUICHICI,   Fairbanks,   opposed   Mr.   Spaulding's                                                               
appointment,  because there  are  enough  labor organizations  in                                                               
Alaska  that could  put  forward  names of  people  who are  more                                                               
oriented toward labor than Mr. Spaulding.                                                                                       
MR. JAY  QUAKENBUSH, Fairbanks, expressed  his concern  about Mr.                                                               
Spaulding's appointment.                                                                                                        
     Seats  on boards  like  this need  to  have a  balanced                                                                    
     view...and certainly  the labor seat that  this man has                                                                    
     been  nominated for  should  come  from someone  within                                                                    
     labor, someone who has been  active either in the field                                                                    
     or dealing closely  with the labor unions  on the labor                                                                    
     side of things.                                                                                                            
SENATOR SEEKINS  asked if  he or  Mr. Guichici  was aware  of any                                                               
members of organized labor who applied for this position.                                                                       
MR.  GUICHICI  replied no.  "Usually  when  a vacancy  comes  up,                                                               
someone  within the  agency  goes and  seeks  out individuals.  I                                                               
didn't know there  was an open enrollment  or application process                                                               
for these positions.                                                                                                            
SENATOR  SEEKINS  asked  if   the  commissioner  didn't  actively                                                               
solicit for any applications.                                                                                                   
MR.GUICHICI replied, "None whatsoever."                                                                                         
MR.  QUAKENBUSH  said  as  president  of  a  building  trade,  he                                                               
received  no  notification   that  this  seat  was   open.  As  a                                                               
participant in the Central Labor  Council in Fairbanks, he hadn't                                                               
heard anything on that level either.                                                                                            
MS.  ROBERTA  DEMOSKI,  International Brotherhood  of  Electrical                                                               
Workers (IBEW), Anchorage, said she  had a couple of concerns and                                                               
that  she deals  with  Mr.  Spaulding on  a  daily  basis in  his                                                               
capacity at Matanuska Electric Association.                                                                                     
     One of the issues I  have with his appointment into the                                                                    
     labor  seat  there  on  the Labor  Board  is  that  Mr.                                                                    
     Spaulding works  for an employer  - and I  believe it's                                                                    
     not  secret -  that has  had a  very contentious  labor                                                                    
     relations atmosphere  and culture.  I think it  will be                                                                    
     very difficult for anybody in  that situation to sit on                                                                    
     a   board  in   a   seat  that   is   supposed  to   be                                                                    
     representative of  labor and then  on a daily  basis go                                                                    
     to  an  employer  who has  an  anti-labor  culture  and                                                                    
     atmosphere that's prevalent at that property.                                                                              
     The other  thing is  I believe  that by  appointing Mr.                                                                    
     Spaulding to  the labor seat  on this  board [violates]                                                                    
     the  intent and  spirit of  the statute.  The panel  is                                                                    
     supposed   to  be   comprised   of  perspectives   from                                                                    
     organized labor,  a perspective  from management  and a                                                                    
     perspective from  the public sector. I  actually sat on                                                                    
     the  Labor   Relations  Board  and  sat   through  some                                                                    
     hearings  on  panels   with  those  three  perspectives                                                                    
     presented and  I can tell  you it is very  important in                                                                    
     the   decision-making  process   that   all  of   those                                                                    
     perspectives be brought forward  and considered so that                                                                    
     ultimately  everybody who  shows up  at that  hearing -                                                                    
     organized labor  and the employers -  feel like they've                                                                    
     gotten  a  fair  shake.  I believe  that  you  will  be                                                                    
     nullifying  that perception  and,  maybe, reality  [is]                                                                    
     that the  fair hearing process  is going to go  out the                                                                    
     window if you  have a management person put  in a labor                                                                    
     I agree  with John in  Fairbanks. I believe  that there                                                                    
     are  many  up and  coming  labor  leaders in  organized                                                                    
     labor that  would be a  tremendous asset to  that board                                                                    
     and have a contribution.                                                                                                   
MR. PAUL  WEISENBERGER, Sheet Metal  Workers, Anchorage,  said he                                                               
didn't know Mr. Spaulding personally,  but did know of the strong                                                               
labor  animus exhibited  by MEA  administration and  some of  the                                                               
board members.                                                                                                                  
     I  know this  from my  status  as an  MEA consumer  and                                                                    
     citizen in the Matanuska Valley  for many years. I have                                                                    
     received many anti-labor fliers  and letters from Wayne                                                                    
     Carmony, who is  the director at MEA and  who I believe                                                                    
     is   Mr.  Spaulding's   boss.   I   believe  that   Mr.                                                                    
     Spaulding's management  position at MEA  is detrimental                                                                    
     to fairly  representing the seat  to which he  has been                                                                    
     appointed.  I  hope  the  board  will  reconsider  this                                                                    
     position and appoint someone who  is more suited to the                                                                    
     job from a true labor perspective. Thank you.                                                                              
MR.  SCOTT BRIDGES,  Teamsters Local  959,  said he  has been  in                                                               
Alaska since 1959  and is an attorney. He is  an MEA consumer and                                                               
objects to Mr.  Spaulding's appointment for all  the reasons that                                                               
have already been stated.                                                                                                       
     There is  absolutely no way  that an individual  in his                                                                    
     capacity  could  serve  objectively from  a  management                                                                    
     perspective.  I  think  this appointment  needs  to  be                                                                    
     withdrawn and  I think labor needs  to be appropriately                                                                    
     notified and proper candidates need  to be appointed to                                                                    
     fill that slot.                                                                                                            
MS. JOHN LANDERFELT, Laborers Local  341, opposed Mr. Spaulding's                                                               
appointment  for all  the reasons  previously  stated and,  "most                                                               
sincerely because it seems to violate  the intent of what a labor                                                               
board is supposed to be, which is viewpoints from all sides."                                                                   
CHAIR  BUNDE  closed the  hearing  and  said  he would  hold  the                                                               
confirmation over for another meeting, probably next week.                                                                      
               SB 358-ALASKA RAILROAD TRACK WORK                                                                            
CHAIR CON BUNDE announced SB 358 to be up for consideration.                                                                    
MS. WENDY LINDSKOOG, Director,  External Affairs, Alaska Railroad                                                               
Corporation (ARRC), said  she was asked to try to  come up with a                                                               
solution with all  the different parties involved  in this issue.                                                               
That is what they did. She offered to go through the highlights.                                                                
CHAIR BUNDE  said that  everyone had  read it  and there  were no                                                               
further questions.                                                                                                              
SENATOR  SEEKINS  moved  to  pass  SB  358  from  committee  with                                                               
individual  recommendations   and  attached  zero   fiscal  note.                                                               
Senators  Bettye Davis,  Ralph Seekins,  Hollis French  and Chair                                                               
Con Bunde voted yea; and SB 358 moved from committee.                                                                           
                  SB 377-STATE MECHANICAL CODE                                                                              
CHAIR CON BUNDE announced SB 377 to be up for consideration.                                                                    
MR.  ZACK WARWICK,  staff to  Senator  Therriault, sponsor,  said                                                               
there seems to be a lot of misunderstanding about this bill.                                                                    
     All it  does is  grant the  adoption authority  for the                                                                    
     Mechanical  Code to  the Department  of Labor.  It does                                                                    
     not change  the code  from one brand  to the  other. It                                                                    
     simply grants the adoption  authority to the department                                                                    
     since   historically  there   has  been   no  statutory                                                                    
     adoption authority.... In addition,  it does not change                                                                    
     the way  the plan  inspections or  building inspections                                                                    
     are done.  The Department  of Public Safety  will still                                                                    
     be doing the  plan inspections with regard  to fire and                                                                    
     life safety issues. The Department  of Labor will still                                                                    
     do   all  post-building   inspections  in   regards  to                                                                    
     mechanical,  plumbing  and   electrical  codes.  That's                                                                    
     exactly what's been going on for years.                                                                                    
     The  bill simply  recognizes that  the mechanical  code                                                                    
     and  the  plumbing  code are  closely  related  because                                                                    
     nearly  all mechanical  contractors  are also  plumbing                                                                    
     contractors. Given this  relationship and regardless of                                                                    
     which  code is  adopted, it  makes more  sense to  have                                                                    
     these two closely related  codes coordinated within one                                                                    
     single  agency. It  comes down  to  basically a  policy                                                                    
     call by the Legislature...                                                                                                 
CHAIR  BUNDE asked  if he  thought it  was possible  to alleviate                                                               
some of the misunderstanding. "What can  we do to lower the level                                                               
of anxiety this bill seems to have created?"                                                                                    
MR. WARWICK replied  that he has received calls from  a number of                                                               
different  industry groups,  Associated Builders  and Contractors                                                               
as well  as the International  Code Council. The letter  from the                                                               
Council does  not support SB  377, but it was  completely unaware                                                               
of what  the bill really does.  It is being put  where all family                                                               
codes will receive a fair hearing.  He added that he didn't think                                                               
it was possible to clear up the misconceptions.                                                                                 
MR.  JEFF ROBINSON,  Cliff's  Mechanical,  Anchorage, opposed  SB                                                               
377.  His understanding  is  that the  underlying  intent of  the                                                               
legislation is  to bring back  the Uniform Mechanical  Code (UMC)                                                               
just to appease a minority group of contractors.                                                                                
MR. ROBINSON said he is also  a member of the American Society of                                                               
Heating, Refrigeration and Air Conditioning  Engineers and out of                                                               
all the people he has spoken to, no one supports it.                                                                            
MS. VICKI  STERLING, private consultant in  the design community,                                                               
opposed SB  377 saying it is  a life safety issue,  which belongs                                                               
in the Department of Public Safety.                                                                                             
MR.  CRAIG STEPHENSON,  International  Code  Council, opposed  SB                                                               
377.  He  has  read  the  actual bill,  which  has  very  generic                                                               
language. He  is concerned that  it is just  a way to  undo codes                                                               
that have  been adopted. He urged,  "What we need to  be doing is                                                               
taking a  very thoughtful look  at how  codes are adopted  in the                                                               
State of Alaska that serves Alaska the best."                                                                                   
MR.  ERNIE  HETRICK,  design professional,  opposed  SB  377.  He                                                               
thought all  codes should be  adopted by  the same group  so they                                                               
can be considered together.                                                                                                     
MR. KELLY  NICOLEILLO, Department of  Public Safety, said  he was                                                               
available to answer technical questions.                                                                                        
MR. DALE  NELSON, President, Alaska Professional  Design Council,                                                               
said he  sent the committee a  letter dated April 13  stating its                                                               
concerns. He  added one more  concern -  that there is  no stated                                                               
fiscal impact resulting from changing departments.                                                                              
MR. JOHN  KNABE, Training  Director, UA  Local 375,  Plumbers and                                                               
Pipefitters Joint  Apprenticeship Training Committee, said  he is                                                               
also chair of the City  of Fairbanks Plumbers Examining Board and                                                               
that all members support SB 377.                                                                                                
     We feel  it is a  good compromise and will  address the                                                                    
     current  situation  we  have of  having  two  different                                                                    
     codes  that   aren't  in   harmony  with   each  other,                                                                    
     published  by two  separate  organizations and  adopted                                                                    
     and  administered by  two  separate state  departments.                                                                    
     This   fragmented    approach   is    problematic   and                                                                    
     responsible for a great amount  of frustration and cost                                                                    
     to  the necessary  training  and  certification in  our                                                                    
     industries. We  have a  very good  working relationship                                                                    
     with  the  State  Department  of  Labor.  SB  377  will                                                                    
     benefit  the  public  and   our  industry  by  insuring                                                                    
     coordination of the plumbing and mechanical codes.                                                                         
MR.  JIM  LAHTI, Plumbers  and  Pipefitters  Local 375,  said  it                                                               
trains and maintains a significant  workforce to the standards of                                                               
the Uniform  Plumbing Code. "To  help maintain  consistency, it's                                                               
only  logical that  both the  mechanical and  the plumbing  codes                                                               
should fall under the jurisdiction of the Department of Labor."                                                                 
MR. RODNEY  BROWN, Plumbers and Pipefitters  Local 375, supported                                                               
SB 377.                                                                                                                         
MR. RANDY BAYER supported SB 377.                                                                                               
     I  believe to  have both  the mechanical  code and  the                                                                    
     plumbing  code  under  the Department  of  Labor  would                                                                    
     facilitate  the  enforcement  and oversight  that  this                                                                    
     code provides for the citizens of the State of Alaska.                                                                     
MR. DAVID PEET, Fairbanks resident, supported SB 377.                                                                           
     It just  seems to me  that these two codes  are related                                                                    
     to  our industry  and  if they  are,  they should  fall                                                                    
     under the jurisdiction of one department.                                                                                  
MR.  DENNIS MICHAEL,  President and  owner, American  Mechanical,                                                               
thought SB 377 would give the public a better quality product.                                                                  
     There really  is no inspection  on the  jobsite because                                                                    
     the Department  of Labor  has no  authority to  look at                                                                    
     mechanical  systems when  they are  already on  the job                                                                    
     site looking at plumbing systems....                                                                                       
MR. DAYN COOPER, Chandler Plumbing  and Heating, supported SB 377                                                               
for the reasons already stated.                                                                                                 
MR. MARK  ANDERSON, Construction  Manager, Chandler  Plumbing and                                                               
Heating, supported SB 377 for all the previously stated reasons.                                                                
MR.  BILL SAGER,  Executive Director,  Mechanical Contractors  of                                                               
Fairbanks, said his members unanimously  support SB 377. "We feel                                                               
that since  our members have  to work  under both codes,  it just                                                               
makes sense for them to be administered out of one department."                                                                 
MR. CHUCK DEERDON, Ketchikan Building  Inspector, said he also is                                                               
representing   the    State   Homebuilder's    Association.   The                                                               
Homebuilder's Association opposed SB 377.                                                                                       
     One of  the reasons  is that  the IMC,  which a  lot of                                                                    
     municipalities     have    adopted,     includes    the                                                                    
     International  Mechanical Code  as part  and parcel  of                                                                    
     that. From  the city  perspective, the  interlocking of                                                                    
     the   International   Fire  Code,   the   International                                                                    
     Building  Code and  the  International Mechanical  Code                                                                    
     are  pretty important  and they  go to  the State  Fire                                                                    
     Marshall's office for review.  I think the system isn't                                                                    
     broken, but  I think  it could be  improved and  if you                                                                    
     don't mind, I'd like to  offer a suggestion. That would                                                                    
     be that  the Governor's  Office could possibly  get the                                                                    
     State  Fire Marshall's  Office,  which is  on the  same                                                                    
     level as the  Department of Labor, and get  a letter of                                                                    
     understanding   [so]...one   of  the   state   plumbing                                                                    
     inspectors   can  go   out  and   also  do   mechanical                                                                    
     inspections.  The  State  Fire  Marshall's  Office  can                                                                    
     still  do the  plan  review including  the life  safety                                                                    
     issues and  then we can  tailor the codes  to encompass                                                                    
     the   training   for   the  mechanical   and   plumbing                                                                    
     contractors.  But, at  this point,  I don't  think that                                                                    
     the issue  of the  Fairbanks -  and I  understand their                                                                    
     issues on  the Mechanical Plumber Contractor's  Union -                                                                    
     I  think they  have  a valid  point  that the  training                                                                    
     could be done  better and that they  could possibly mix                                                                    
     the codes so that things could work for them....                                                                           
CHAIR BUNDE agreed with him.                                                                                                    
MR. STEVE  SHOWS said he would  speak on his own  behalf. He said                                                               
he has 35 years in the  construction industry, 25 years have been                                                               
in  the State  of Alaska  regulating construction  for municipal,                                                               
borough,  state  and  federal   government.  He  opposed  SB  377                                                               
primarily  because  it doesn't  address  the  big picture  issue,                                                               
which is the safety of Alaskans in a built environment.                                                                         
     I think  there are  things related  to this  topic that                                                                    
     Alaskans do agree  on. Number one, the  State of Alaska                                                                    
     does  not  have  an effective  construction  regulation                                                                    
     environment.  It just  doesn't exist.  I believe  it is                                                                    
     evident that our municipal  governments, each and every                                                                    
     one  of  them...they  do  have   an  effective  way  of                                                                    
     administering these regulations  without conflicts in a                                                                    
     coordinated manner. So, I think  we have a roadmap that                                                                    
     the State of  Alaska may look to to see  how can we get                                                                    
     out of this quagmire, move  forward as a team, because,                                                                    
     trust me,  building a major  building takes a  team; it                                                                    
     takes qualified  licensed individuals on the  job doing                                                                    
     the  work.  It  takes  a knowledgeable  set  of  people                                                                    
     reviewing  plans and  all the  nuances and  intricacies                                                                    
     those  plans  have to  provide  the  safety that  codes                                                                    
     require.  Codes  need to  be  reviewed  and adopted  by                                                                    
     impartial technically proficient  individuals - as many                                                                    
     of them as you can  find working together. Beyond that,                                                                    
     as Reagan said, trust, but verify....                                                                                      
     So,  I leave  you  with that  thought  that things  are                                                                    
     working  well in  the plan  review area  of coordinated                                                                    
     technically adopted  codes in  public safety.  There is                                                                    
     no  effective field  inspection  by  the Department  of                                                                    
     Labor and  I can tell  you that for  a fact. If  a non-                                                                    
     union contractor gets a bid,  I may see the state labor                                                                    
     inspector  in  my  town  checking   up  on  him.  These                                                                    
     partisan interests  are understandable.  Economic self-                                                                    
     sufficiency  is a  human drive  that's very  important,                                                                    
     but  we need  to understand  that and  not adopt  codes                                                                    
     that  limit   new  technology   and  material   to  the                                                                    
     financial benefit  of a small  group of  contractors to                                                                    
     the detriment of the people  of the State of Alaska who                                                                    
     look to  their legislature and representatives  to help                                                                    
     them get the biggest bang  for the buck. Life safety is                                                                    
     important. We're  probably one of the  most seismically                                                                    
     active areas  on the world;  fire, loss of life  is not                                                                    
     something to be swallowed  over without the best effort                                                                    
     that we can bring to bear to address it.                                                                                   
CHAIR BUNDE said, "That best effort,  then, would be for folks to                                                               
forget their turf battles and work together?"                                                                                   
MR.  SHOWS  replied, "You  got  it.  My  personal opinion  is  to                                                               
consolidate    these    construction     regulations    in    one                                                               
department...." [END OF SIDE A]                                                                                                 
TAPE 04-32, SIDE B                                                                                                            
MR. SHOWS continued:                                                                                                            
     I've seen the Department of  Labor do their best effort                                                                    
     and  it  falls  short  and it's  one-sided.  That's  my                                                                    
     personal opinion.                                                                                                          
SENATOR SEEKINS asked how much  inspection of the mechanical work                                                               
is done by the Department of Public Safety (DPS).                                                                               
MR. SHOWS answered that the DPS  reviews plans, but does no field                                                               
inspection work that he knows of.                                                                                               
MR.  MAX MIELKE,  Business Manager,  Plumbers and  Pipefitters UA                                                               
Local 262,  said he is  also president  of the Alaska  State Pipe                                                               
Trades  Association,  which  represents over  1,000  members  who                                                               
install mechanical  systems every day for  mechanical contractors                                                               
in Southeast.  They all strongly  support SB 377. He  thought the                                                               
issue  is  basically  between  the  mechanical  contractors,  the                                                               
people  who  install  the mechanical  systems  and  the  building                                                               
     I want  to say one  thing in my closing  statement. The                                                                    
     IMC is  not a consensus code.  Only government building                                                                    
     officials are on the review  committee when it comes to                                                                    
     the  International  Code  Committee whereas  under  the                                                                    
     Uniform Mechanical  Code, there's a  balanced committee                                                                    
     for  all  industries  involved  in  putting  mechanical                                                                    
     contractors and building officials....                                                                                     
CHAIR BUNDE  said he wasn't  going to move  the bill today  and a                                                               
lot more  people wanted to testify.  He wanted to go  through the                                                               
list and  have people say  yes or no  on whether they  support SB                                                               
MR. ROBERT BUCH, Local 367, supported SB 377.                                                                                   
MR. GARY HILE, Anchorage, supported SB 377.                                                                                     
MR. HARRY DEVASCONCELLES, Alaska  Oil and Gas Association (AOGA),                                                               
opposed SB 377.                                                                                                                 
MR. GREG MOORE, NANA/Colt, Anchorage, opposed SB 377.                                                                           
MR. PAT  KNOWLES said he is  not a union member  and supported SB                                                               
MR. FRANK  KAPILARI, Knik Plumbing,  said he represents  the non-                                                               
union side of this and supports SB 377.                                                                                         
MR. COLIN MAYNARD, BBFM Engineers, opposed SB 377.                                                                              
MR. CRAIG HATELY, Local 367, supported SB 377.                                                                                  
MR. STEVE MILLER, Plumbers Local 3673 ATC, supported SB 377.                                                                    
CHAIR BUNDE thanked everyone for  their brevity and said he would                                                               
sit on the  bill for a while  to see if a  proper consensus would                                                               
SENATOR SEEKINS said for the record:                                                                                            
     I [was]  co-chair of  the Safety  Code Task  Force last                                                                    
     summer  with   Representative  Dahlstrom.   I've  spent                                                                    
     several hundred hours on this  matter. I think I'm spun                                                                    
     up about just  as much on where the turf  war is on any                                                                    
     of  it.  The   one  thing  that  I  want   to  say  for                                                                    
     consideration at  this point is that  under the current                                                                    
     system  there is  no inspection  by  the Department  of                                                                    
     Public  Safety on  mechanical  applications as  they're                                                                    
     applied  in  the  field.  Once   it's  done,  it's  not                                                                    
     inspected; it's  only a plan  review. As  I understand,                                                                    
     this  bill would  not eliminate  the  plan review  from                                                                    
     [the  Department of]  Public Safety.  That is  a safety                                                                    
     issue  that  continues  in place.  But,  there  is  the                                                                    
     matter  now that  an inspection  process would  have to                                                                    
     take  place  from  the  Department  of  Labor  just  as                                                                    
     they're supposed to do. They  may not in all cases, but                                                                    
     they're supposed to  do it and they're tasked  to do it                                                                    
     on the plumbing. So, it  appears to me...as I looked at                                                                    
     the  review from  the Safety  Code Task  Force that  in                                                                    
     order to  put in  place the mechanism  that we  came to                                                                    
     some consensus should exist in  the overall safety code                                                                    
     system in the State of  Alaska, that it's going to take                                                                    
     some time to design it  out and work with the different                                                                    
     departments and  try to  put in  place, because  of the                                                                    
     autonomy of  the cities - Juneau,  Anchorage, Fairbanks                                                                    
     - where they  have their own department.  The code then                                                                    
     applies to  pretty much  the rest  of the  state except                                                                    
     that  it's a  minimum code  that those  cities have  to                                                                    
     meet and if there's any  waiver from that, they have to                                                                    
     get approval.                                                                                                              
     What the co-chair and I  said was that it seems logical                                                                    
     that in the long run that  we should at least have some                                                                    
     kind of  inspection of the  mechanical and  plumbing on                                                                    
     the same level at the same  time and that it seems that                                                                    
     most  mechanical  contractors  are  also  the  plumbing                                                                    
     contractors  on the  job. So,  to have  some uniformity                                                                    
     that   would  be   simple,   let's   just  change   the                                                                    
     administration of  this code  from here to  here. There                                                                    
     is  no,  as  one  person  said  or  alleged,  no  known                                                                    
     underlying intent  from any  member of  the Legislature                                                                    
     to try  to favor one group  or the other, but  there is                                                                    
     an  intent  to make  sure  that  we have  an  efficient                                                                    
     operation   that  also   involves  inspection   of  the                                                                    
     completed work  as well as  just plan review.  We think                                                                    
     that that's  best, in the  long run, serves  the public                                                                    
     interest and the  safety of the people in  the State of                                                                    
CHAIR  BUNDE reiterated  that he  would hold  the bill  and hoped                                                               
time would build a consensus.                                                                                                   
          HB  29-REAL PROPERTY TRANSACTIONS/LICENSEES                                                                       
CHAIR CON BUNDE announced HB 29 to be up for consideration.                                                                     
REPRESENTATIVE  ROKEBERG,   sponsor,  said   this  bill   is  the                                                               
culmination of two  years of effort by a  task force representing                                                               
the Alaska  Association of Realtors  throughout the  state. There                                                               
have been  some difficulties since the  legislature first adopted                                                               
statutory language in 1992 requiring the disclosure of agency-                                                                  
type relationships between clients  and the real estate licensees                                                               
in  the State  of  Alaska,  a needed  step  forward  in terms  of                                                               
consumer protection. The statutory  requirements were found to be                                                               
vague  and   difficult  to  enforce.  This   bill  redesigns  and                                                               
clarifies the  meaning and duties  and provides a  foundation for                                                               
the promotion of  sound and good commerce in the  state. The real                                                               
estate  industry and  the associated  businesses  provide over  a                                                               
third of the state's domestic product  and people need to give it                                                               
due consideration.  He pointed out  that one of the  key elements                                                               
of  consumer protection  in this  bill requires  a pamphlet  that                                                               
clearly  outlines the  responsibilities  of their  relationships.                                                               
Vicarious liability is  also provided for. One  of two amendments                                                               
provided  to  the committee  embrace  technical  changes and  one                                                               
fills a gap in the  area of psychological impairment of property.                                                               
The bill clarifies  what the duty to investigate  is and requires                                                               
disclosure of it.                                                                                                               
SENATOR SEEKINS asked him to explain the concept of dual agency.                                                                
REPRESENTATIVE ROKEBERG replied:                                                                                                
     Dual agency is an  allowed form of relationship between                                                                    
     a  real estate  licensee and  their clients.  What this                                                                    
     bill does  is get rid  of that, because it's  an almost                                                                    
     unworkable  concept  -  where under  the  principle  of                                                                    
     common law, a  licensee in this instance  would have to                                                                    
     serve two masters  simultaneously. That's fundamentally                                                                    
     a  difficult  thing  in terms  of  the  perspective  of                                                                    
     fairness and  equity in dealing with  the clientele....                                                                    
      We solved this by going to what's called the neutral                                                                      
     relationship and witnesses will describe that for you.                                                                     
SENATOR SEEKINS  asked if the real  estate industry has a  lot of                                                               
confusion  when someone  comes  to an  agent  who represents  the                                                               
REPRESENTATIVE  ROKEBERG disclosed  that  he is  a licensed  real                                                               
estate  broker   in  Alaska,  but  only   deals  with  commercial                                                               
properties and deferred the answer to one of his witnesses.                                                                     
CHAIR BUNDE asked  if it was an oversimplification to  say that a                                                               
real estate agent  who lists his house has  the responsibility to                                                               
get him the highest prices that's practical.                                                                                    
REPRESENTATIVE ROKEBERG replied that is correct.                                                                                
CHAIR  BUNDE asked  if  it  was also  the  responsibility of  the                                                               
buyer's agent to get him the lowest price possible.                                                                             
REPRESENTATIVE ROKEBERG said that's right.                                                                                      
SENATOR FRENCH disclosed that his  wife is a licensed real estate                                                               
agent and he might have a conflict.                                                                                             
CHAIR  BUNDE  moved  amendment 1,  BA.4,  4/9/04  Bannister,  and                                                               
objected for discussion purposes.                                                                                               
                      A M E N D M E N T 1                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSSHB 29(JUD) am                                                                                                     
Page 5, line 11:                                                                                                                
     Delete all material.                                                                                                       
     Insert "to imply a duty to                                                                                                 
               (1)  investigate                                                                                                 
                    (A)  a matter that the licensee has not                                                                     
          agreed to investigate; or                                                                                             
                    (B)  a matter that is not known by the                                                                      
          seller, prospective buyer, lessor, prospective lessee,                                                                
          or licensee; or                                                                                                       
               (2)  disclose, unless otherwise provided by law,                                                                 
     events that have occurred on the real estate that might                                                                    
     affect whether a person wants to buy or lease the real                                                                     
REPRESENTATIVE  ROKEBERG   said  amendment   1  related   to  the                                                               
psychological  impairment issue.  Subsection (B)  speaks only  to                                                               
the duty  to investigate, not  to disclose. Subsection  (A)(4) on                                                               
page 4, line 17, addresses the disclosure.                                                                                      
SENATOR FRENCH  said it  makes sense to  not have  to investigate                                                               
something that isn't  known by the seller or the  buyer, but then                                                               
(2) jumps  back to (A)(4) which  says "it shall not  be construed                                                               
to imply a duty to disclose,  unless provided by law, events that                                                               
have occurred that might affect whether  or not a person wants to                                                               
buy or lease the real estate.                                                                                                   
REPRESENTATIVE ROKEBERG replied if a  crime had been committed in                                                               
the house or if the house had  a HIV or AIDS resident, that can't                                                               
be  disclosed  according   to  federal  law.  He   said  a  state                                                               
disclosure statute says all sellers  of a residence have to fully                                                               
disclose  stipulated  items  on their  disclosure  statement.  He                                                               
emphasized  that the  seller, not  the licensee,  is required  to                                                               
SENATOR FRENCH asked for a list of the required disclosures.                                                                    
CHAIR  BUNDE  withdrew his  motion  to  adopt amendment  1  until                                                               
Senator French had an opportunity to review the list.                                                                           
REPRESENTATIVE  ROKEBERG said  he  had no  objections. He  wanted                                                               
everyone to understand the bill.                                                                                                
CHAIR BUNDE moved amendment 2,  BA.2, and objected for discussion                                                               
                      A M E N D M E N T 2                                                                                   
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSSHB 29(JUD) am                                                                                                     
Page 7, lines 15 - 16:                                                                                                          
     Delete "if the licensee's broker maintains"                                                                                
     Insert "but the licensee's broker has a duty to maintain                                                                   
REPRESENTATIVE  ROKEBERG  explained  that   it  is  a  clarifying                                                               
amendment on  page 7,  line 15,  that says  that the  broker must                                                               
maintain confidentiality.                                                                                                       
CHAIR BUNDE removed his objection and amendment 2 was adopted.                                                                  
He said that a substantial number of people want to testify and                                                                 
he began with Peggy Ann McConnochie.                                                                                            
MS. PEGGY ANN MCCONNOCHIE, Alaska Association of Realtors, said                                                                 
she also represented the task force that worked on this bill.                                                                   
She wanted to touch on four points for the committee.                                                                           
     First of all,  we want you to know  that every licensee                                                                    
     in the State  of Alaska and all over  the United States                                                                    
     understands  the need  for  consumer protection.  After                                                                    
     all, we  are the first ones  to deal with a  person who                                                                    
     decides to buy  a home; we're the people  who deal with                                                                    
     somebody  who  wants  to  rent  a  property  and  we're                                                                    
     dealing with the investor who  wants to buy their first                                                                    
     investment. We look  into their eyes and  see the trust                                                                    
     and we  want to make  sure that we maintain  that trust                                                                    
     and their trust is well placed.                                                                                            
     The second  topic is  representation -  how it  used to                                                                    
     be.  It  used  to  be that  every  single  real  estate                                                                    
     licensee,  wherever  he  went, always  represented  the                                                                    
     seller.  It didn't  matter if  he were  going from  one                                                                    
     agency and looking  at a property that  was listed with                                                                    
     another agency, everybody  represented the seller. When                                                                    
     in  point  of  fact,   that's  not  the  way  licensees                                                                    
     necessarily  operated or  the way  the buyer  believed.                                                                    
     The  buyer thought,  'Gosh, they're  spending all  this                                                                    
     time with me; they're showing  me houses listed by that                                                                    
     other company; they must represent me.'                                                                                    
     Thank   goodness    the   law   changed.    Thanks   to                                                                    
     Representative Rokeberg in 1992  we got the law changed                                                                    
     to  allow  for  something called  buyer  representation                                                                    
     where you could come to buy  a house and the agent that                                                                    
     you worked with  represented you. That was  a very good                                                                    
     What  this  legislation  is  going  to  move  to  is  a                                                                    
     situation in which, rather than  the broker and all the                                                                    
     agents  representing  every  single  seller  who  comes                                                                    
     through that  agency to  sell a house  - it  will allow                                                                    
     that broker in the office  to designate one licensee in                                                                    
     the  office to  work with  the buyer,  one licensee  to                                                                    
     work  with the  seller, and  for the  broker to  set up                                                                    
     firewalls  so that  confidentiality of  all parties  is                                                                    
     maintained. As many  times as we can  get an individual                                                                    
     who  wants  representation  to be  represented  by  the                                                                    
     agents,  the better  off we're  going to  be. In  other                                                                    
     words,  we're going  to take  away  that dual  licensee                                                                    
     situation. Our goal  by this legislation is  to make it                                                                    
     far more fair and  more understandable for all parties,                                                                    
     the consumer and the licensees alike.                                                                                      
MS. MCCONNOCHIE said that agency  people from all over the state,                                                               
residential, commercial and  property and association management,                                                               
worked on  this bill. She  said that a  lot of research  was done                                                               
including looking at  what other states have done.  The states of                                                               
Washington, Montana,  Nebraska and Colorado have  agency laws and                                                               
basic tenants that meet much of what Alaska wants.                                                                              
     We  also knew  that  [the  law] had  to  make sense  no                                                                    
     matter  what type  of real  estate you're  doing.... We                                                                    
     also knew that  once we got this law  passed, we needed                                                                    
     to have a plan in order  to be able to implement it and                                                                    
     we  do. Our  association,  the  Alaska Association,  is                                                                    
     committed to make this work.                                                                                               
The implementation  dates are  set very  purposely so  the public                                                               
can be educated about the  changes. Association members will also                                                               
go out  to communities to educate  agents and work with  the Real                                                               
Estate Commission  to design the  pamphlet telling  how licensing                                                               
works.  They will  help brokers  to design  the changes  in their                                                               
policy and procedures manuals.                                                                                                  
     This  bill  calls for  the  Real  Estate Commission  to                                                                    
     design  supervision  standards   for  their  licensees,                                                                    
     especially when we deal  with designated licensees. The                                                                    
     Alaska  Real Estate  Commission knows  that the  Alaska                                                                    
     Association of  Realtors is going to  provide them with                                                                    
     some things  to look  at; we're  going to  provide them                                                                    
     with words  to look at so  they can take it  from there                                                                    
     and design  those standards. The second  thing is we're                                                                    
     going  to  be  also  providing  them  with  samples  of                                                                    
     potential  policy procedure  manuals that  will help  a                                                                    
     broker implement  a confidentiality standard  for their                                                                    
     office.  We do  not want  to  leave any  broker in  the                                                                    
     lurch wondering how  in the world they are  going to be                                                                    
     able to implement these policies....                                                                                       
MR. PERRY UNDERWOOD,  Alaska Association of Realtors,  said he is                                                               
also  the  owner  and  broker of  Coldwell  Banker  Fortune  with                                                               
offices in  Anchorage, Eagle River  and Wasilla. He summed  up HB                                                               
29 in five major points                                                                                                         
     First, HB  29 establishes  specific requirements  as to                                                                    
     when and  how a real  estate licensee must  disclose to                                                                    
     the consumer their relationship....                                                                                        
     The  second  thing HB  29  does  - it  eliminates  dual                                                                    
     agency  and the  problems that  are inherent  with dual                                                                    
     agency.  Yet, it  allows real  estate licensee  to sell                                                                    
     their own  listings.... Real estate licensees  can sell                                                                    
     their own listings with the  consent and the disclosure                                                                    
     of their customers                                                                                                         
     The  third thing  that this  bill does  - it  moves the                                                                    
     relationship  with  the  consumer  to the  level  of  a                                                                    
     person    who    is   actually    being    represented.                                                                    
     Traditionally, the  broker is  who the  relationship is                                                                    
     with, but the broker, in  most cases, never sees, meets                                                                    
     or even talks  to the consumer. It's being  done by the                                                                    
     agents  that  work   underneath  this  broker....  That                                                                    
     avoids  the   current  situation  we  have   where  all                                                                    
     licensees in  the company, as  well as the  broker, are                                                                    
     expected  to  represent  and  act  on  behalf  of  both                                                                    
     The  fourth thing  that this  bill does  - our  current                                                                    
     statute  that we  operate under  provides no  duties or                                                                    
     minimum  standards under  which licensees  operate. Our                                                                    
     bill  before   you,  HB  29,  sets   forth  duties  and                                                                    
     responsibilities  by which  all licensees  must operate                                                                    
     their  business clearly  establishing those  duties and                                                                    
     what  the public  on a  minimum can  expect from  us as                                                                    
     The  fifth  thing that  this  bill  does that  is  very                                                                    
     important   -   it  eliminates   vicarious   liability.                                                                    
     Vicarious liability, as  you may know, is  if I, acting                                                                    
     as your representative, go out  and say or do something                                                                    
     - it might  be by action, neglect or dishonesty  - in a                                                                    
     traditional   relationship   under  common   law,   the                                                                    
     offended  party could  not  only sue  me,  but sue  the                                                                    
     person I  was representing who may  be totally innocent                                                                    
     in  this.   This  bill   protects  the   consumer  from                                                                    
     vicarious liability  and the  exposure that  would come                                                                    
     from dishonest dealings.                                                                                                   
MR. DAVE FEEKEN, Legislative and Industry Issues Chair, Alaska                                                                  
Association of Realtors, said he is also the broker of ReMax on                                                                 
the  Kenai Peninsula.  He said  the bill  had been  worked on  by                                                               
members  from  all over  the  state,  but  he wanted  to  comment                                                               
specifically on amendment 1. The key is the word "investigate."                                                                 
TAPE 04-33, SIDE A                                                                                                            
MR.  FEEKEN  said  it  attempts  to  clarify  the  issues  of  an                                                               
investigation. The  original paragraph  came from  Washington and                                                               
Nebraska  statutes.  Also,  the   amendment  attempts  to  insert                                                               
language saying the Real Estate Commission can regulate.                                                                        
MR.  STEVE CLEARY,  Executive  Director,  Alaska Public  Interest                                                               
Research  Group (AKPIRG),  said he  was concerned  that consumers                                                               
are  adequately protected  specifically since  the common  law is                                                               
being  abrogated. He  thought standardization  of the  forms, the                                                               
disclosures  and  eliminating   vicarious  liability  would  help                                                               
consumers.  However, he  failed  to understand  how a  designated                                                               
agency isn't  a dual agency.  Continuing a football  game analogy                                                               
that  was  used  earlier,  if   a  back-up  quarterback  and  the                                                               
quarterback are on  the same team, or the agents  are in the same                                                               
agency, they would supposedly be  playing against each other, but                                                               
even  with  firewalls set  up,  it's  hard  to believe  that  the                                                               
consumer's  best  interests would  be  served  if people  in  one                                                               
agency are representing both seller and buyer.                                                                                  
MS.  LINDA  GARRISON, Owner  and  Broker,  AAR Number  1  Buyer's                                                               
Agency, said:                                                                                                                   
     The only thing I'm concerned  about is that the bill is                                                                    
     being  rushed through.  The common  law  of agency  has                                                                    
     worked  for  hundreds of  years  in  protection of  the                                                                    
     consumer. So, any dilution,  even partial abrogation or                                                                    
     total  abrogation  is   extremely  detrimental  to  the                                                                    
MS. GARRISON explained that a  lawsuit brought the issue to light                                                               
and now it  is hard to understand. Currently there  are two types                                                               
of designated  agency under  common law and  dual agency  is one,                                                               
which demands that the agent alert  the consumer up front. It can                                                               
exist in two  instances, one is when the same  agent in a company                                                               
represents both the  buyer and the seller and the  other when one                                                               
agent  in  a  company  represents the  buyer  and  another  agent                                                               
represents the seller.                                                                                                          
     The  designated agency  is basically  a proposal  where                                                                    
     the  broker will  appoint one  agent  to represent  the                                                                    
     seller and  another agent to represent  the buyer. That                                                                    
     is still  dual agency; however, it  is undisclosed dual                                                                    
     agency.  The public,  the buyer  and  the seller,  will                                                                    
     have an agent representing  them without being required                                                                    
     to  do  the  protective   language  that  is  currently                                                                    
     required  in  the statute  for  dual  agency. It's  the                                                                    
     common  law  of  agency   that  creates  the  fiduciary                                                                    
     responsibilities that  the agent owes to  the consumer.                                                                    
     Those  are  such responsibilities  of  confidentiality,                                                                    
     accountability,  loyalty, diligence,  obedience -  very                                                                    
     We run  into a potential  problem - what if  the broker                                                                    
     appoints one experienced agent  to represent the seller                                                                    
     and another  somewhat inexperienced agent  to represent                                                                    
     the  seller? It  is an  internal problem,  but remember                                                                    
     the   consumer  will   think   they   have  their   own                                                                    
     representation.  With   dual  agency,  they   know  the                                                                    
     In   conjunction  with   that,   the   limits  of   the                                                                    
     liabilities  -   the  liability  is  limited   for  the                                                                    
     brokerages and for the agents  and it does reduce their                                                                    
     remedy  in a  legal recourse  for only  actual damages,                                                                    
     which are  very difficult  to prove.  So, when  we take                                                                    
     the combination  of this - unrelated  and not addressed                                                                    
     in  this bill  - currently,  a  person can  get a  real                                                                    
     estate  license with  only 20  hours  of education  and                                                                    
     passing a test  - so, that in itself is  a detriment to                                                                    
     the consumer. This  is the largest sale  or purchase of                                                                    
     most people's lives. That isn't  addressed in the bill.                                                                    
     When  we  combine  that already  detrimental  [indisc.]                                                                    
     with the  consumer with  the removal  of common  law of                                                                    
     agency of all of  those responsibilities, we combine it                                                                    
     with the  limit of  liabilities to broker  and limiting                                                                    
     the  recourse  of  the public,  the  detriment  to  the                                                                    
     consumer far [outweighs] any benefit....                                                                                   
MS. GARRISON  thought the vicarious  liability paragraph  on page                                                               
10 could  be handled  in a  different manner.  "When you  add all                                                               
these  things up,  consumer  protection does  not  exist in  this                                                               
MR.  KIRK WICKERSHAM,  Anchorage real  estate broker  and lawyer,                                                               
said  he  served on  the  task  force  that helped  develop  this                                                               
legislation. He  said this  law is  a step  forward both  for the                                                               
industry and  for the  consumer and  encouraged the  committee to                                                               
pass it.  It generally follows  the trend other states  are going                                                               
in  to  come  up  with alternatives  to  conventional  agency  as                                                               
defined  in the  common  law  statutes. He  thought  some of  the                                                               
problem with  it is that  it approaches the  relationship between                                                               
the parties  and their agents  as an adversarial  type situation,                                                               
but a real  estate transaction is not like that.  The parties may                                                               
disagree, but generally  speaking, they are working in  a more or                                                               
less  cooperative fashion  to get  a  transaction completed  that                                                               
both of  them want. "I think  this approach is reflective  of how                                                               
real estate transactions  actually work and the  type of services                                                               
that are provided by real estate professionals."                                                                                
CHAIR BUNDE thanked him and  closed public testimony and promised                                                               
that it would be heard again.                                                                                                   
        HB  91-RETIRED PEACE OFFICER'S MEDICAL BENEFITS                                                                     
CHAIR   CON  BUNDE   announced  CSHB   91(FIN)  to   be  up   for                                                               
consideration  and  that it  was  accompanied  by a  power  point                                                               
REPRESENTATIVE  TOM ANDERSON,  sponsor,  said that  HB  91 is  of                                                               
great  importance to  law officers  whether  they be  correction,                                                               
firemen  or  policemen.  It is  a  cost-avoidance  bill.  Current                                                               
policy  requires that  Tier 2  and  Tier 3  peace officers  defer                                                               
retirement  an extra  five  years to  qualify  for their  medical                                                               
benefit. He believed that deferment  has a price tag and although                                                               
this bill has  a fiscal note from the Division  of Retirement and                                                               
Benefits,  the Department  of Corrections  and the  Department of                                                               
Public Safety haven't reported in at this juncture.                                                                             
     I think those fiscal  notes would basically deplete the                                                                    
     elevated fiscal note from  [the Division of] Retirement                                                                    
     and Benefits....  I hope you will  consider that. Also,                                                                    
     when a  peace officer  defers retirement, I  think it's                                                                    
     important to  note that  the operational  cost increase                                                                    
     is greater  than the  actual benefit  cost. So,  I want                                                                    
     you to  think of this,  first of all,  recognizing that                                                                    
     PERS  is managed  on the  basis of  equality among  its                                                                    
     members  and without  this bill  passing,  there is  no                                                                    
     fairness. You're  aware of what  it does; it  gives 20-                                                                    
     year retirement for medical  retirement and benefits to                                                                    
     peace officers....  There is a $23,105  savings in base                                                                    
     pay and  leave during  the first  year after  a 20-year                                                                    
     correction officer  3 takes  normal retirement.  So, we                                                                    
     see  a savings....  These  examples go  on  and on  and                                                                    
     on.... This is important even  though there is a fiscal                                                                    
     note, which again,  I think can be  reconciled down. We                                                                    
     have  to defer  to the  judgment that  we want  to keep                                                                    
     these peace  officers and the  old adage I said  in the                                                                    
     previous committee, hey, you  look at the service...and                                                                    
     the risks  and the  stress that  are involved...20-year                                                                    
     medical  retirement doesn't  seem  that  out of  kilter                                                                    
     with respect to the career and that choice.                                                                                
CHAIR  BUNDE  said  he  once  heard  that  because  the  cost  of                                                               
recruiting and training  was so expensive, the state  had to keep                                                               
these  people longer.  Now, because  of  other circumstances,  we                                                               
want them to leave sooner.                                                                                                      
REPRESENTATIVE  ANDERSON responded  that  Mr.  Fox's power  point                                                               
presentation would show that a 20-year  career span is as good as                                                               
it gets.                                                                                                                        
MR. MIKE FOX, PUBLIC SAFETY  EMPLOYEES ASSOCIATION (PSEA), showed                                                               
the  committee  a   power  point  presentation  on   HB  91  that                                                               
illustrated  how  HB 91  provides  medical  benefits for  retired                                                               
peace officers  after 20 years  of accredited service  instead of                                                               
after  working five  years beyond  normal retirement.  It removes                                                               
the disincentive  for peace officers  to take  normal retirement.                                                               
It  reestablishes parity  with all  other PERS  members. Mercer's                                                               
current  experience is  that 21  out of  100 peace  officers will                                                               
make it to retirement.                                                                                                          
SENATOR HOLLIS FRENCH asked what Mercer's Human Resources is.                                                                   
MR. FOX  replied that they  are the actuaries who  are contracted                                                               
by the Division  of Retirement and Benefits  to perform analyses.                                                               
He continued  that DPS  hired 90  troopers in  2002 and  2003, 13                                                               
percent per year; Department of  Corrections (DOC) hires about 70                                                               
[indisc.] per year, about 10  percent to maintain level staffing.                                                               
The remaining Tier 1 trooper  class had an approximate 62 percent                                                               
separation rate. This means that  38 percent of the troopers left                                                               
are Tier 1.                                                                                                                     
MR. FOX  explained that only Tier  2 and Tier 3  members would be                                                               
affected by this  bill. Major medical is already  provided to all                                                               
Tier 1  recipients. In 1986,  Tier 2 was created,  which provided                                                               
major  medical at  age 60.  In  2001, the  current situation  was                                                               
created where  after a 10-year  vesting period, major  medical is                                                               
provided at age 60 or at  normal retirement unless you're a peace                                                               
officer and then you must work five more years.                                                                                 
     The  perspective from  HB 91  simply removes  the five-                                                                    
     year extra  requirement for peace officers.  That's all                                                                    
     it  does. The  justification for  change -  current law                                                                    
     withholds  the benefit  from peace  officer members  of                                                                    
     PERS  unless   an  extra  five  years   is  worked;  it                                                                    
     undermines  the   intent  of  peace   officers'  normal                                                                    
     retirement; it  inhibits recruitment and  retention and                                                                    
     it causes inequality among PERS members.                                                                                   
     HB 91 is a cost-avoidance  bill. Current policy intends                                                                    
     to defer  retirement of  Tier 2  and 3  peace officers.                                                                    
     Operational cost  increases from a  deferred retirement                                                                    
     are  greater  than the  actual  benefit  costs. A  cost                                                                    
     comparison  example -  the  largest  group affected  is                                                                    
     correctional officers (CO).  A correctional officer 2's                                                                    
     additional base  pay and  leave costs  for one  year of                                                                    
     deferred retirement  is at  least $18,252.  DRB advises                                                                    
     that the  average benefit cost  is $9,670.  The current                                                                    
     policy  intends to  defer retirements  for five  years.                                                                    
     The choice is to fund  the benefit or fund the deferred                                                                    
     retirement cost increase.                                                                                                  
     COs by years  of service - When Tier 2  and 3 COs defer                                                                    
     retirement, the 15  - 20 group will be added  to the 20                                                                    
     - 25  group. This shift  in the workforce  profile will                                                                    
     significantly increase operational costs....                                                                               
MR. FOX explained the chart for Chair Bunde and reminded the                                                                    
committee that retirement is cut in half for those who divorce.                                                                 
CHAIR BUNDE pointed out that he couldn't assume that all the                                                                    
people in Tier 2 would continue to work after their 20-year                                                                     
retirement. There would be some reduction.                                                                                      
MR. FOX agreed and added that people drop out all along the                                                                     
curve. He continued:                                                                                                            
     Risk  - If  20 years  are  not completed,  there is  no                                                                    
     benefit change  and no new  costs. If an  officer makes                                                                    
     it to 20,  the benefit cost is balanced  by the payroll                                                                    
     reduction. There is  no risk of a  benefit cost without                                                                    
     a corresponding cost-avoidance.                                                                                            
     Problems  associated with  peace officers  working past                                                                    
     normal   retirement   -  increased   health   problems,                                                                    
     increased  risk of  injury, higher  compensation, lower                                                                    
     morale and burnout.                                                                                                        
Disability  rates were  provided  by Mercer  Human Resources  and                                                               
show  that troopers  and correctional  officers average  about 34                                                               
years  of age  when they  are hired  and they  reach 20  years of                                                               
service  at  approximately  age  54.  Another  graph  showed  the                                                               
increase in disability rates as  peace officers age. He noted the                                                               
steep increase when retirement is  deferred past age 54. The line                                                               
representing  other  employees  who  are not  peace  officers  is                                                               
significantly lower  than the peace  officers and the  gap widens                                                               
all the way to age 60.                                                                                                          
The  graph, using  2002 data  for  administrative versus  officer                                                               
positions,   illustrated  the   limited  opportunity   for  peace                                                               
officers to  move into administrative  positions as they  age. It                                                               
showed 709  corrections officers and 30  administrative jobs, 336                                                               
troopers and  33 administrative jobs. "It's  impractical to think                                                               
a person can  continue through their career until  they get older                                                               
and then move into a desk job."                                                                                                 
CHAIR BUNDE  asked if  he had data  that showed  typical behavior                                                               
for someone  who now retires  under the Tier 1  at age 54  or 55.                                                               
"They don't just play golf, do they?"                                                                                           
MR. FOX replied no, but he didn't  have any data to show him. He,                                                               
himself, is one of those guys,  however, and knows a whole lot of                                                               
others like  himself. He explained  that the PERS mission  is not                                                               
to provide a living wage for life.  It is, after 20 years, to get                                                               
45  percent of  your  average  monthly income,  at  the most.  He                                                               
elected  to buy  dental and  vision insurance  and the  long-term                                                               
care  insurance. He  elected to  buy a  survivor benefit  for his                                                               
wife. So, his actual monthly benefit  is much lower than where it                                                               
started out.  He did not  know of  any of his  contemporaries who                                                               
didn't go on to other employment.                                                                                               
CHAIR BUNDE asked if it was  likely that they had health benefits                                                               
in their other employment.                                                                                                      
MR. FOX  replied no. A  lot of guys  end up doing  something that                                                               
they have more  of an interest in and have  the freedom to pursue                                                               
even if it pays less money or benefits.                                                                                         
     PERS  is  managed  on  the   basis  of  equality  among                                                                    
     members. Normal retirement is after  20 years for peace                                                                    
     officers  and  after 30  years  for  all others.  Peace                                                                    
     officers  pay a  higher contribution  rate than  all of                                                                    
     the  members  to   maintain  equality.  Current  policy                                                                    
     withholds  benefits from  peace officer  members unless                                                                    
     they  work  five  extra  years.  HB  91  corrects  this                                                                    
     prejudice against peace officers.                                                                                          
     The current policy is unfair.  If a peace officer beats                                                                    
     the  odds, makes  it to  20, the  current policy  is to                                                                    
     defer  their   retirement.  That  is   accomplished  by                                                                    
     unfairly withholding  their medical benefit  until they                                                                    
     work five years beyond their normal retirement.                                                                            
     In conclusion,  the current  law undermines  the intent                                                                    
     of normal  retirement for  peace officers  and inhibits                                                                    
     the  PERS  mission  to recruit  and  retain  in  public                                                                    
     service.  HB  91  removes the  disincentives  to  peace                                                                    
     officers  to take  normal retirement  and reestablishes                                                                    
     parity among  all PERS  members and  this bill  is good                                                                    
     for peace officers and it's also good policy.                                                                              
CHAIR BUNDE  noted there  were no questions  and thanked  him for                                                               
his presentation.                                                                                                               
MR. CHUCK HANSEN, Correctional  Officer, Leman Creek Correctional                                                               
Center, said he has an  undergraduate degree in human development                                                               
and a  master's degree in  human services. He  represents himself                                                               
and  fellow correctional  officers  in  Alaska. He  is  a Tier  1                                                               
employee and has been  on the job 19 years and  9 months. His job                                                               
is  part-time,  seasonal,  and  he  doesn't  get  any  retirement                                                               
benefit for  it. He  noted the sick  behaviors and  violence that                                                               
make up  the daily stresses in  his job. The number  of prisoners                                                               
who are HIV  positive or have hepatitis  A, B or C  is far higher                                                               
than the  public population, because  inmates are  often involved                                                               
in high-risk  activities before they  come into the  system. This                                                               
also puts  COs at higher  risk than ordinary  citizens, resulting                                                               
in a potential need for long-term care health benefits.                                                                         
     Correctional officers  rarely make the  present 20-year                                                                    
     retirement  goal. I've  watched  over  250 floor  staff                                                                    
     come  and  go  without reaching  that  magic  time...at                                                                    
     Lemon Creek, alone.  I've lost track of  about 25 more.                                                                    
     One day, a  short time ago, I  asked my superintendent,                                                                    
     Dan Carothers, 'In your  27-year career in corrections,                                                                    
     how  many  floor  officers,  which  are  non-management                                                                    
     staff, have  you known  to complete  20 years  with the                                                                    
     Department   of   Corrections?'   Four   people.   More                                                                    
     recently,  a co-worker  made it  to 20.  So, that  is a                                                                    
     total  of  five  making  it   to  retirement  that  Mr.                                                                    
     Carothers knows of. The likelihood  that COs will reach                                                                    
     the  20-year  mark  before retirement  is  bad  enough,                                                                    
     pushing the mark to 25  years for full medical benefits                                                                    
     is next to  impossible and demeaning to us  when we are                                                                    
     all  at risk  of serious  long-term illness  because of                                                                    
     our jobs.                                                                                                                  
     HB  91 will  insure an  appropriate retirement  package                                                                    
     for those of  us who make it that far.  It is not cost-                                                                    
     effective  to continually  pay to  train new  people in                                                                    
     order  to   replace  those  who  see   the  25-year  as                                                                    
     unattainable and  so they quit  early. And  yet, that's                                                                    
     exactly what's happening now.                                                                                              
MS.  MELANIE  MILLHORN,  Director,  Division  of  Retirement  and                                                               
Benefits, deferred  her testimony on  the fiscal note to  let the                                                               
large number of citizens testify.                                                                                               
MR. DEAN  BAUGH, Finance  Director, City of  Homer, said  he also                                                               
represents  the Alaska  Government  Finance Officers  Association                                                               
(AGFOA).  He  didn't  want  to say  that  police  officers  don't                                                               
deserve this, but right now the PERS systems can't afford it.                                                                   
     If you  would have asked  me a  year ago, I  might have                                                                    
     said  that  is  one  thing, because  my  city  was  100                                                                    
     percent funded,  but if you  look at  me now, all  of a                                                                    
     sudden, I'm $6 million in the hole.                                                                                        
He  disputed the  fact put  forward by  Mercer's Human  Resources                                                               
that 21  percent of  the officers  would retire  at 20  years. He                                                               
thought closer to 80 - 100  percent of officers will retire at 20                                                               
years,  if medical  coverage is  provided. So,  the costs  in the                                                               
fiscal note  are incorrect. He  also noted  that it is  state law                                                               
once Tier 2  and 3 are changed again to  20-year retirements with                                                               
full medical, it  can't be changed again. At this  point, PERS is                                                               
looking  at creating  a Tier  4  to keep  the budget  actuarially                                                               
CHAIR BUNDE asked if the  committee changed the tier system today                                                               
so that it's not retroactive, would he support it.                                                                              
MR. BAUGH responded  that the issue would be argued  all the more                                                               
because  someone  who  had  been  there for  15  years  has  more                                                               
benefits than someone who has been there for one year.                                                                          
CHAIR  BUNDE said  the fiscal  note was  attached to  the state's                                                               
budget, not the municipalities' budgets.                                                                                        
MR. BAUGH responded that the state has said it would fund it for                                                                
the next year, but not forever.                                                                                                 
MR. MAURICE HUGHES, Alaska State Trooper, Public Service                                                                        
Employees Association, said it has approximately 350 members.                                                                   
     The difference between  Tier 2 and Tier 3  is that when                                                                    
     Tier 2  was created, the  members kept paying  the same                                                                    
     percentage for 20-year retirement.                                                                                         
TAPE 04-33, SIDE B                                                                                                            
3:55 p.m.                                                                                                                       
MR. HUGHES continued:                                                                                                           
     So, in  relation to the  statement where they  would be                                                                    
     going  back  to  paying   for  30  years...our  members                                                                    
     continue to pay that 7.5 percent....                                                                                       
     I would  just like  to make  some statements  about our                                                                    
     core message  and the message  about HB 91 and  that is                                                                    
     the  policy   that's  in  effect   right  now   -  it's                                                                    
     influencing  police officers  at Tier  2 or  Tier 3  to                                                                    
     defer  their retirement  from a  20-year retirement  to                                                                    
     25-year retirement.  This is being done  by the holding                                                                    
     [back] of  a retirement  benefit, which is  the medical                                                                    
     benefit. The  police officer who decides  to defer that                                                                    
     retirement, it could be for  a good reason. There could                                                                    
     be a  good reason  that officer  wants to  stay around,                                                                    
     but if  a person  is forced  to stay  to get  a medical                                                                    
     benefit that  he would otherwise  have if he  stayed in                                                                    
     some other  occupation at  his normal  retirement, then                                                                    
     that's not right.                                                                                                          
     It's hard  to accept, but  when you say old  and police                                                                    
     officer, the  two don't go  together. Police work  is a                                                                    
     young  man's game.  When you  get older,  you get  hurt                                                                    
     easier; it takes a longer time  to mend when you do get                                                                    
     hurt. Mike  pointed out that  you have issues  of sleep                                                                    
     deprivation and  it's tougher to  [do] shift  work. The                                                                    
     burnout issue is a real issue, the older you get.                                                                          
     On  the  other  end   of  the  spectrum,  with  younger                                                                    
     officers  coming along,  when they  get to  that 7  - 8                                                                    
     years on the job, they  have to make that determination                                                                    
     whether or not they want  to stay that extra five years                                                                    
     to receive  their medical  benefit or  to go  ahead and                                                                    
     possibly change  careers entirely  or to go  to another                                                                    
     system.  The extra  five years  of working  on holidays                                                                    
     and working  on weekends  and working when  your family                                                                    
     is asleep  is not a  real conceivable goal  for someone                                                                    
     to have to work that extra five years....                                                                                  
MR.  PAUL COMOLLI,  Juneau Police  Officer,  said he  represented                                                               
himself and  fellow police officers,  not the city or  the chief.                                                               
He related  how his long-time  friend, Kenai Police  Officer John                                                               
Watson, was  killed in  the line  of duty  while responding  to a                                                               
welfare check on a citizen, on Christmas Day 2003.                                                                              
     He  was searching  for a  person who  reportedly needed                                                                    
     help.  He was  doing his  job on  Christmas, trying  to                                                                    
     keep you  safe, just like we  all do - on  every shift,                                                                    
     every day and every night....  If John had survived two                                                                    
     more years on the job,  he would have been eligible for                                                                    
     normal retirement. Far less than  half of us make it to                                                                    
     20. John  had only two more  to go; he almost  beat the                                                                    
MR. COMOLLI said the current  policy is ill-conceived, unfair and                                                               
blatantly  prejudicial against  peace  officers.  This bill  does                                                               
nothing more than reestablish the parity among all PERS members.                                                                
     I've got my  benefits. It's not fair to me  to leave my                                                                    
     young brothers and sisters behind  me that are going to                                                                    
     step  up and  continue to  do this  job without  what I                                                                    
     have. It's not too much to ask.                                                                                            
CHAIR BUNDE commented  that he has a brother and  two nephews who                                                               
are police officers and knows what he is talking about.                                                                         
MR. LARRY SIMMONS, Certified Public  Accountant (CPA), said he is                                                               
finance director  for the  City of  Kenai, and  that he  had been                                                               
following this  bill since last year  and at that time  the AGFOA                                                               
passed a resolution against it. When  Tier 2 was created in 1986,                                                               
it didn't include medical benefits  until members reached the age                                                               
of 60, a requirement that stayed  in place for 15 years. In 2001,                                                               
benefits  were changed  for police  and fire  members to  receive                                                               
medical benefits  after 25  years. "Prior to  that there  were no                                                               
medical benefits, period, until age 60."   At that time, the PERS                                                               
was 106  percent funded, but  the following year the  PERS system                                                               
was funded  at 75 percent and  the expense for the  added medical                                                               
benefits are  huge. He was  very concerned about the  fiscal note                                                               
for HB 91. It is based on actual experience that only 21 percent                                                                
of the eligible members would retire.                                                                                           
     Do  you think  more people  will retire  when you  give                                                                    
     them medical benefits  at 20 years than  will retire at                                                                    
     20  years  if they  don't  have  medical benefits?  The                                                                    
     answer is  totally obvious and, therefore,  that fiscal                                                                    
     note  is well  understated.  I think  for  the City  of                                                                    
     Kenai, it is four times understated....                                                                                    
State funding for the increased benefits can go away when the                                                                   
next legislature decides to make it go away.                                                                                    
MR. CHRIS BURNS, Mercer Human Resource Consulting, said he would                                                                
answer questions.                                                                                                               
CHAIR BUNDE  noted there  were no questions  and thanked  all who                                                               
testified  and said  HB 91  would be  held over.  There being  no                                                               
further business to  come before the committee,  he adjourned the                                                               
meeting at 4:07 p.m.                                                                                                            

Document Name Date/Time Subjects